WM Wrigley JR. Company: Innovation in China's confectionery market
Who:
Wrigley, which is the subsidiary of Mars in the confectionery market
Immediate Issue/Problem Being Faced:
In China, Wrigley wants to expand the market and do the innovation. The other international players, such as Cadbury, Ferrero, Hershey and Nestle, also expect to speed up their performance in China. So Wrigley needs to think about the innovation and the competitive advantage in the industry to keep the largest confectionery company in the world.
Basic Issues:
Wrigley goes into the healthy-related confectionery and attracts more customers.
Wrigley was not very familiar with the Chinese customers and needs to develop the region related products in China.
Wrigley’s has a lot of domestic and multinational competition.
Hershey, the leading U.S. confectionary maker just entered into a joint venture with China’s largest domestic competition, Lotte.
Chinese only consumed .7kg of confectionary per year – they satisfied their sweet tooth with dried fruits.
Urgency/Importance:
Even though Wrigley has taken over a big percentage of the Chinese market, it also needs to expand its market in China and creates new region related products to attracts more customers. The urgency problem to Wrigley should be understand Chinese market and culture.
Decision Criteria:
1.-How many percentages of customers in the confectionery industry in China?China has the 4th largest economy in the world, because of population; Wrigley’s market will be huge as long as they capture the market ahead of the competition. 2.-Will new product launches or business strategies be a competitive advantage? For troditional culture in China, thousands company produce new products as same time. It is really important to one step ahead among the new product for Wrigley. 3.-The index of survey to determine what new confectionery product to launch?Wrigley’s will have to be highly innovative to ensure that their confection is researched and made as healthy as possible and convey that to their customers. 4.-How do the Wrigley’s merge with Mars’ sugar confectionery brands to establish a competitive product and strategy in China or the sugar-free product?Chinese people take great interest in their health, as well as their children’s health. 5.There is a possibility that the Chinese won’t sway from their healthy, less-expensive alternatives. It is difficult to make sugar confectionary healthy
Alternatives:
-Do nothing to innovation to expand the market, but considering the cost and using the low price to attract more customers and maintain the market stand.
-Innovate the new products such as limitation for spring festival, children’s day. And also innovate the health related product because this is a big consideration factor in the market.
-Use the Wrigley’s established brand name and still use the English to create the luxury looking to attract more rich customers.
-Merge with the big competitors in China and to do the monopolize market.
Concentrate solely on the chewing gum market
.Work hard to capture the confectionary market
Missing Information:
• Can Wrigley make health conscious confectionary? (This may be costly to determine in the science labs)
• Will the rural people be intrigued by the confectionary line – as it stands, they relatively have no interest, as well Lotte is better in-tune with the rurals
• Can the rural people afford it?
Assessment of Alternatives:
1-Do nothing
Pro: It is easy to achieve, and it is less time to increase the expectation for lower price.
Con: It is less competitive advantage, and it’s easy to be surpassed by competitors.
2- Innovation
Pros: It is more competitive advantage because the health related product is new and the theory attracts more customers. And the customers like try to different style, if the products are always new to customers, even for the package, it is more likely to hold customers. I think it is the best way to expand the market effectively.
Cons: It needs time and cost to analyze the customers’ preference and innovate the new stuff. And it is maybe needs to hire more professional employees, especially the Chinese local people. It is the cost.
3- Luxury product
Pro: Attract rich customers and speed up the income because the reputation and price of Wrigley will speed up quickly.
Con: It is short time revenue speeding because not much customers are all rich in the market. It is risk.
4-cooperate with a big competitor in China
Pro:
Save time
Save cost
If it real worked, big benefits will come.
con:
Not easy to find one fit for
Benefits shared will reduce the income
Lose brand independence and will in charge for the lose of Cooperater
5-Concentrate solely on the chewing gum market Pros • Maintain market share • Market share can increase • Better research to make bigger contribution to society Cons • May lose market share to Hershey and Lotte • Lose market share • Waste money on useless research 6-. Work hard to capture the confectionary market Pros • Make more money • Will be able to sustain market share in gum and non-gum • If market captured, will be good for entire confectionary market in world Cons • Waste time and money if it doesn’t work • People of China will lose confidence in Wrigley • Resources (R&D) may be spread too thin
Selection of Preferred Alternative:
Comparing the alternatives, it is the best choice for Wrigley to expand its products and create the newly goods by innovating. The innovation is the key role in remaining Wrigley current position and growing in the future.
Assumptions:
By choosing this alternative we are under the assumption that Wrigley's school based education programs will lead it to an even larger market. The customers all know what kind of confectionary product is healthy for them. And we assume the customers pay more attention to the health problem.
Action/Implementation Plan:
First, Wrigley should keep up with the education program systems because they can help the child to know the confectionery knowledge and health problem.And secondly, the Wrigley should do surveys in Chinese market and know what they need and expect. Thirdly, they need to organize an innovation team and create the innovation culture. This is most important to complete the innovation.
WM Wrigley Case
Case Analysis Template
Reading:
WM Wrigley JR. Company: Innovation in China's confectionery marketWho:
Wrigley, which is the subsidiary of Mars in the confectionery marketImmediate Issue/Problem Being Faced:
In China, Wrigley wants to expand the market and do the innovation. The other international players, such as Cadbury, Ferrero, Hershey and Nestle, also expect to speed up their performance in China. So Wrigley needs to think about the innovation and the competitive advantage in the industry to keep the largest confectionery company in the world.Basic Issues:
Urgency/Importance:
Even though Wrigley has taken over a big percentage of the Chinese market, it also needs to expand its market in China and creates new region related products to attracts more customers. The urgency problem to Wrigley should be understand Chinese market and culture.Decision Criteria:
2. -Will new product launches or business strategies be a competitive advantage? For troditional culture in China, thousands company produce new products as same time. It is really important to one step ahead among the new product for Wrigley.
3. -The index of survey to determine what new confectionery product to launch?Wrigley’s will have to be highly innovative to ensure that their confection is researched and made as healthy as possible and convey that to their customers.
4. -How do the Wrigley’s merge with Mars’ sugar confectionery brands to establish a competitive product and strategy in China or the sugar-free product?Chinese people take great interest in their health, as well as their children’s health.
5. There is a possibility that the Chinese won’t sway from their healthy, less-expensive alternatives. It is difficult to make sugar confectionary healthy
Alternatives:
-Do nothing to innovation to expand the market, but considering the cost and using the low price to attract more customers and maintain the market stand.
-Innovate the new products such as limitation for spring festival, children’s day. And also innovate the health related product because this is a big consideration factor in the market.
-Use the Wrigley’s established brand name and still use the English to create the luxury looking to attract more rich customers.
-Merge with the big competitors in China and to do the monopolize market.
Concentrate solely on the chewing gum market
.Work hard to capture the confectionary market
Missing Information:
Assessment of Alternatives:
1-Do nothing
Pro: It is easy to achieve, and it is less time to increase the expectation for lower price.
Con: It is less competitive advantage, and it’s easy to be surpassed by competitors.
2- Innovation
Pros: It is more competitive advantage because the health related product is new and the theory attracts more customers. And the customers like try to different style, if the products are always new to customers, even for the package, it is more likely to hold customers. I think it is the best way to expand the market effectively.
Cons: It needs time and cost to analyze the customers’ preference and innovate the new stuff. And it is maybe needs to hire more professional employees, especially the Chinese local people. It is the cost.
3- Luxury product
Pro: Attract rich customers and speed up the income because the reputation and price of Wrigley will speed up quickly.
Con: It is short time revenue speeding because not much customers are all rich in the market. It is risk.
4-cooperate with a big competitor in ChinaPro:
- Save time
- Save cost
- If it real worked, big benefits will come.
con:- Not easy to find one fit for
- Benefits shared will reduce the income
- Lose brand independence and will in charge for the lose of Cooperater
5-Concentrate solely on the chewing gum marketPros
• Maintain market share
• Market share can increase
• Better research to make bigger contribution to society
Cons
• May lose market share to Hershey and Lotte
• Lose market share
• Waste money on useless research
6-. Work hard to capture the confectionary market
Pros
• Make more money
• Will be able to sustain market share in gum and non-gum
• If market captured, will be good for entire confectionary market in world
Cons
• Waste time and money if it doesn’t work
• People of China will lose confidence in Wrigley
• Resources (R&D) may be spread too thin
Selection of Preferred Alternative:
Comparing the alternatives, it is the best choice for Wrigley to expand its products and create the newly goods by innovating. The innovation is the key role in remaining Wrigley current position and growing in the future.
Assumptions:
By choosing this alternative we are under the assumption that Wrigley's school based education programs will lead it to an even larger market. The customers all know what kind of confectionary product is healthy for them. And we assume the customers pay more attention to the health problem.
Action/Implementation Plan:
First, Wrigley should keep up with the education program systems because they can help the child to know the confectionery knowledge and health problem.And secondly, the Wrigley should do surveys in Chinese market and know what they need and expect. Thirdly, they need to organize an innovation team and create the innovation culture. This is most important to complete the innovation.